SMART PLANNING FOR CLIMATE CHANGE & THE SUSTAINABILITY IMPERATIVE

Transcription

1 SMART PLANNING FOR CLIMATE CHANGE & THE SUSTAINABILITY IMPERATIVE Owen Glubiak, NativeEnergy, Inc. Greg Strong, Spring Hill Solutions, LLC Morgan Wolaver, Otter Creek Brewing Company Craft Brewer s Conference April 24, 2009

2 Smart Planning for Climate Change & the Sustainability Imperative Why pay attention Control Costs/Energy Security Be Prepared Sell More Beer! How to do it Assessing and Mitigating Impact Planning Strategically Who s doing it

3 We are facing a challenge that will affect all aspects of human activity for decades to come. It will affect trade and investment decisions. It will reshape the competitive landscape. Dr. Gro Harlem Brundtland Special Envoy to the UN Secretary-General on Climate Change Bali, December 10, 2007 Source: Reuters

4 I have solid proof that Global Warming is real

5 U.S. Temperature and Precipitation Changes by Source: Intergovernmental Panel on Climate Change (IPCC)

6 Cost Increase: Future Outlook Energy Lack of supply meeting demand EIA forecasts 17% increase in average price Agriculture: Hops Decrease in yields Past price increases with supply shortage Water EPA looking to upgrade infrastructure Hundreds of $Billions Cost passed to consumer (Direct & Indirect) Source: Department of Energy (DOE) Source: U.S. Climate Change Science Program Source: Environmental Protection Agency (EPA)

7 The Guinea Pigs New Belgium Brewery 475,000 Barrels of beer produced (2007) Location: Fort Collins, Colorado Category: Regional Craft Brewery Otter Creek Brewery 30,000 Barrels of beer produced (2007) Location: Middlebury, Vermont Category: Microbrewery

8 Balance Sheet: Energy, Climate Change, Water New Belgium Brewery Electric ($120,000) Water ($650,000) Hops ($640,000)

9 Balance Sheet: Energy, Climate Change, Water Electric ($12,500) Otter Creek Brewery Water ($47,000) Hops ($200,000)

10 Sell More Beer

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12 Sell More Beer: Coffee vs. Beer Coffee Source: American Journal for Agricultural Economics Consumers awareness for fair trade/organic logo s on coffee. Growing at 40% per YEAR Willing to pay price premium: $0.20 per pound Actual Premium: Fair trade- $1.50 per pound Organic- $3.00 per pound Demographics: ages Beer Demographics Source: Scarborough Research of NY 51% beer drinkers b/w ages Affluent 48% prefer premium quality beers

13 Be Prepared: Climate Regulation Currently in Massachusetts: Mandatory Greenhouse Gas Reporting Regulation (310 CMR 7.71) Facilities with stationary sources of air emissions that collectively emitted more than 5,000 tons of carbon dioxide equivalents (CO2e) (approximately 450,000 gallons of #2 oil) Proposed regulations by the U.S. EPA: Facilities with stationary sources of air emissions that collectively emit more than 25,000 tons of CO2e Equal to emissions from 2,200 homes, 58,000 barrels of oil, or 131 rail cars of coal Based on GHG emissions from 2010

14 Carbon Offsets A Strategic Tool for Engagement Craft Brewer s Conference (Boston) April 24, 2009

15 What Is An Offset?

16 Schrack Farm - Manure Digester Spent $2MM for new barns in 2001 Couldn t get sufficient financing to secure USDA matching grants Offset purchases helped with ~13% of project cost. Made it happen. Pennsylvania family dairy since Cows generating ~ 1000 MWh/yr Reducing 2937 tons CO 2 -e/year

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18 A Brewer s Approach Emissions (Thousands of Tons) FY '03 FY '04 FY '05 FY '06 FY '07* Inbound Freight Outbound Freight Travel & Transport Natural Gas Propane Electricity Offsets Purchased

19 How To Get ROI With Offsets 19 Generally, the process involves the following steps: 1) Measure emissions - 2) Set offset goals within a climate change strategy? 3) Clarify expectations about the benefits of offsetting versus making reductions internally 4) Explore the range of offset offerings 5) Choose offset providers 6) Communicate your actions Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

20 How To Get ROI With Offsets 20 Generally, the process involves the following steps: 1) Measure emissions - Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

21 How To Get ROI With Offsets 21 Generally, the process involves the following steps: 1) Measure emissions - 2) Set offset goals within a climate change strategy? Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

22 Offsets in Business - Strategy 22 Stakeholder Relations -Employees (Timberland, Mohawk Paper) -Customers (Aveda, ClifBar, Stonyfield, GMCR) Enhance Reduction Project ROI vs Offset Costs Regulatory Requirement - EU/CA/RPS STRATEGIC VALUE Brand Identity (Interface, ClifBar, Ben & Jerry s, Stonyfield, GMCR) Gaining Carbon Market Experience Corporate GHG reduction or Green Power commitment - EPA Green Power Partner or Climate Leaders

23 How To Get ROI With Offsets 23 Generally, the process involves the following steps: 1) Measure emissions - 2) Set offset goals within a climate change strategy? 3) Clarify expectations about the benefits of offsetting versus making reductions internally Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

24 How To Get ROI With Offsets 24 Generally, the process involves the following steps: 1) Measure emissions - 2) Set offset goals within a climate change strategy? 3) Clarify expectations about the benefits of offsetting versus making reductions internally 4) Explore the range of offset offerings Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

25 Help build + real time purchases 35 + Projects

26 How To Get ROI With Offsets 26 Generally, the process involves the following steps: 1) Measure emissions - 2) Set offset goals within a climate change strategy? 3) Clarify expectations about the benefits of offsetting versus making reductions internally 4) Prioritize offsets desired attributes 5) Explore the range of offset offerings 6) Choose offset providers Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

27 Check The Guides Tufts Climate Initiative -Study of 13 world wide offset providers, NativeEnergy Top 4 overall, Top ranked US company Consumer s Guide to Retail Offset Providers -Top tier rated provider out of 30 reviewed, Top 3 in US Carbon Offset Provider Evaluation Matrix - 92% score and Most Recommended #1 Ranking

28 Pioneer in Climate-Solutions 28 Founded in 2000 Shelburne, VT NativeEnergy is a pioneer in the US voluntary carbon market in terms of early entrance and the development of a unique funding model for new offset projects. U.S. Founding Member International Carbon Reduction and Offset Alliance

29 29 Conservation, Efficiency & Offsetting

30 How To Get ROI With Offsets 30 Generally, the process involves the following steps: 1) Measure emissions - 2) Set offset goals within a climate change strategy? 3) Clarify expectations about the benefits of offsetting versus making reductions internally 4) Explore the range of offset offerings 5) Choose offset providers 6) Communicate your actions Offsetting Emissions: A Business Brief on the Voluntary Carbon Market Second Edition February 2008 Business for Social Responsibility

31 Communicating Your Actions Walk the Talk, then Talk the Walk Engage Employees. Make sure they understand your objectives and commitment. Involve other stakeholders risk managers, bankers, the Board Be explicit not vague in all communications particularly to clients OR run the risk of greenwashing.

32 Otter Creek Brewing Inc. REDUCING CARBON FOOTPRINT REDUCING OPERATING EXPENSES

33 ASSESSMENT AND ACTIONS Carbon Footprint Assessment Energy Efficiency Upgrades Renewable Energy Recycling: paper, glass, spent grain Waste Reduction Local Economy Messaging/Marketing Providing a Voice on Policy Zero Carbon Footprint

34 CARBON FOOTPRINT ASSESSMENT ON GOING ANALYSIS METHOD DEPENDS ON BUDGET INTERNAL: Direct CO2 emissions onsite INTERNAL/EXTERNAL: Direct & Indirect emissions create through energy use ENVIRNOMENTAL ACCOUNTING: Grain to Consumer.

35 OTTER CREEK ANNUAL CARBON FOOTPRINT (1 of 2) OCB Annual Carbon Footprint Cattle Methane 7% Employee Commutes 10% Boiler Fuel 24% Propane 0% Beer Transport 17% Input Transport 22% Mechanical Carbonation 7% Refrigerant Gas Purchased 7% Electricity 7%

36 OTTER CREEK ANNUAL CARBON FOOTPRINT (2 of 2) ANNUAL EMISSIONS (lbs CO2 equiv.) 2,717,640 SCOPE 1 EMISSIONS 1,051,828 Boiler Fuel 642,842 Propane 8,653 Mechanical Carbonation 202,000 Refrigerant Gas 198,333 SCOPE 2 EMISSIONS 188,411 Purchased Electricity 188,411 SCOPE 3 EMISSIONS 1,477,401 Input Transport 597,335 Beer Transport 421,964 Employee Commutes 261,675 Cattle Methane 196,427 Manufacture of Purchased Materials Waste Disposal BEER SERVING FOOTPRINT 35,000 barrels per year 31 gallons per barrel beers per gallon 11,573,333 beers per year 2,717,640 lbs CO2 per year 0.23 lbs CO2 per 12 oz.beer number low, missing mfg & waste disposal not complete CARBON FOOTPRINT REDUCTIONS 303,666 Biodiesel boiler 118,987 Free-air cooling 43,120 Efficient lighting 8,324 Heat recovery from exchanger 133,235 OTTER CREEK CO2 REDUCTIONS ARE EQUIVALENT TO: 25.3 car equivalents removed from road or 35.4 acres of tress planted

37 ENERGY EFFICIENCY (1 of 2) Pumps high efficiency Coolers microprocessor controlled units Lighting reduced units, high efficient tubes Heat Exchanger - glycol, larger liquor tanks Air Compressors VFD, larger tanks

38 ENERGY EFFICIENCY (2 of 2) UPGRADES SAVINGS Annual Annual Payback Tons CO2 UPGRADE COST Savings Savings (years) Reduced Outside Air $ 3, mwh $ Fan Motors $ mwh $ VFD Compressor $ 13, mwh $ 5, T5 Lighting $ 11, mwh $ 3, TOTAL $ 29, mwh $ 9, Spent grains + other $ 30,000 $ 82, ? Craftboard $ 5,000?.

39 RENEWABLE ENERGY Biofuels (diesel, ethanol) Biomass (wood, grass, etc.) Solar PV Wind Digester Other: algae, hydrogen, solar steam

40 RENEWABLE ENERGY POTENTIAL OTTER CREEK Annual Annual Payback Tons CO2 SYSTEM COST Savings Savings (years) Reduced CHP System Biomass Pellets $1.25M ($2.0M) 75% $ 155, Waste Digestor $2.75M($3.5M) 90% $ 205, Biodiesel favorable for CO2 reduction but no cash savings Solar or wind are not as favorable options for our location Wood Pellets - Creates local $$$ but doesn't eliminate BOD issues/cost Digestor - Eliminates BOD loading but more upfront cost

41 RECYCLING Glass Separate container, crushed has more value Cardboard Separate container broken down, baled has more value Paper & Plastics Mixed containers. Haulers may provide separate containers. Food Waste Compost employee food if possible for brewery land or for employees to take home Spent grains, hops & yeast Animal feed, commercial compost, blend with pellets for boiler.

42 WASTE REDUCTION Make convenient Making part of Company Mission Statement creates Employee ownership. Reductions implemented in SOP Evaluate monthly as part of Operating Budget Share savings with employees

43 LOCAL PURCHASING LOCAL ECONOMY Spend Locally - $1 spent locally is equal to $3 spent in the community that buys your beer. Low Lying Fruit - Pint glass printing, T-shirt printing, rebuilt pallets, brewing ingredients (work with farmers), sell local cheese in retail store Reduces transport emissions

44 MESSAGING/MARKETING Sustainability added value to produce Leverage media Mission Statement message to consumers Values Statement for employees to buy in. Participate Local events (Green-Up Day)

45 PROVIDING A VOICE ON POLICY Communicate - to local and federal legislators. Push - to set aside grants, low interest loans Demand reduction in emissions Invite government to your brewery or brewpub Your Voice is Your Vote

46 ZERO CARBON FOOTPRINT

47 Take Away s Why Costs 80/20 Regulation How Planning Strategically Conservation, Efficiency, Offsetting

48 Questions? Owen Glubiak NativeEnergy Inc x213 Greg Strong Spring Hill Solutions LLC